TEAM ENERGY CORPORATION, v. CIR CIR v. COVANTA ENERGY PHILIPPINE HOLDINGS, INC.

,
G.R. No. 197770, March 14, 2018 G.R. No. 203160, January 24, 2018

TAXPAYER: CEPHI was sent Formal Letters of Demand and

TAXPAYER: Team Energy is a VAT-registered entity engaged in
Assessment Notices by the CIR for VAT, MCIT, and expanded
power generation and electricity sale to NPC under a Build,
withholding tax (EWT) deficiencies. CEPHI thus filed formal
Operate, and Transfer scheme. Team Energy filed with the BIR
letters of protest which remained unacted upon. Thus, CEPHI
an Application for Effective Zero-Rate of its supply of electricity
filed petitions before the CTA, seeking the cancellation and
to the NPC, which was subsequently approved. It later
withdrawal of the deficiency assessments. CEPHI also filed a
appealed before the Court of Tax Appeals its 2003 first quarter
supplemental petition informing CTA that it availed of the tax
VAT claim.
amnesty under R.A. No. 9480, together with the evidence and
documents relevant to its tax amnesty.
Team Energy argues that when it filed its claims for refund with
the BIR and the Court of Tax Appeals, both the administrative GOVERNMENT: The CIR was of the position that CEPHI is not
and judicial claims for refund must be filed within the two (2)- entitled to the immunities and privileges under R.A. No. 9480
year prescriptive period, and that to deny its claim duly proven because its documentary submissions failed to comply with
before the CTA First Division "would result to unjust the requirements under the tax amnesty law.
enrichment on the part of the government."
Since tax amnesty does not extend to withholding agents with
respect to their withholding tax liabilities, the CTA Second
GOVERNMENT: CIR opposed, saying that the amount claimed
Division ruled that CEPHI is liable to pay the deficiency EWT
by Team Energy was not properly documented, and there was
assessment, plus additional deficiency and delinquency
lack of proof that the claims were filed within the prescriptive
interest. CTA En Banc denied CIR’s appeal stating that without
period, and the 30-day period to appeal. CTA First Division
any evidence that CEPHI's net worth was underdeclared by at
partially granted Team Energy’s petition, excluding a specific
least 30%, there is a presumption of compliance with the
amount from VAT exemption for failure to submit
requirements of the tax amnesty law. For this reason, CEPHI
substantiation requirements. CTA also stated that the claims
may immediately enjoy the privileges of the tax amnesty
were filed within the 2-year prescriptive period.
program.
ISSUE: WON the CTA erred in disallowing Team Energy ISSUE: Whether the CTA erred in upholding the validity of the
Corporation's claim for tax refund on the ground of lack of tax amnesty availed by CEPHI.
jurisdiction
HELD: No. CEPHI is entitled to the immunities and privileges of
the tax amnesty program upon full compliance with the
HELD: No. Section 112(D) of the 1997 NIRC is clear that resort
requirements of R.A. No. 9480, which governs the tax amnesty
to an appeal with the Court of Tax Appeals should be made
program for national internal revenue taxes for the taxable
within 30 days either from receipt of the decision denying the
year 2005 and prior years. Subject to certain exceptions, a
claim or the expiration of the 120-day period given to the
taxpayer may avail of this program by complying with the
Commissioner to decide the claim.
documentary submissions to BIR and thereafter, paying the
applicable amnesty tax.
In this case, Team Energy's judicial claim was filed beyond the
30-day period required. Thus, BIR had 120 days to act on the Upon the taxpayer's full compliance with these requirements,
claim. Team Energy, however, filed its appeal with the CTA 67 the taxpayer is immediately entitled to the enjoyment of the
days late. Thus, CTA En Banc correctly denied its claim for immunities and privileges of the tax amnesty program. But
refund due to prescription. When Team Energy filed its refund when: (a) the taxpayer fails to file a SALN and the Tax Amnesty
claim in 2004, the 1997 NIRC was already in effect, which Return; or (b) the net worth of the taxpayer in the SALN as of
clearly already provided for the mandatory and jurisdictional December 31, 2005 is proven to be understated to the extent
requirement of the 120+30-day periods. of 30% or more, the taxpayer shall cease to enjoy these
immunities and privileges.
A claim for input VAT refund or credit is construed strictly
Considering that CEPHI completed the requirements and paid
against the taxpayer.66 Accordingly, there must be strict
the corresponding amnesty tax, it is considered to have totally
compliance with the prescriptive periods and substantive
complied with the tax amnesty program. As a matter of course,
requirements set by law before a claim for tax refund or credit
CEPHI is entitled to the immediate enjoyment of the
may prosper.67 The mere fact that Team Energy has proved its
immunities and privileges of the tax amnesty
excess input VAT does not entitle it as a matter of right to a tax
program.[42] Nonetheless, the Court emphasizes that the
refund or credit. The 120+30-day periods in Section 112 is not
immunities and privileges granted to taxpayers under R.A. No.
a mere procedural technicality that can be set aside if the claim
9480 is not absolute. It is subject to a resolutory condition
is otherwise meritorious. It is a mandatory and jurisdictional
insofar as the taxpayers' enjoyment of the immunities and
condition imposed by law. Team Energy's failure to comply
privileges of the law is concerned. These immunities cease
with the prescriptive periods is, thus, fatal to its claim.
upon proof that they underdeclared their net worth by 30%.
 CIR v. LANCASTER PHILS., INC.,
GR No. 183408, July 12, 2017
TAXPAYER: In 1999, Lancaster's books of accounts and other
accounting records for all internal revenue taxes were
examined by BIR’s officers pursuant to a letter of authority. BIR
cited Lancaster for overstatement of its purchases for the fiscal
year April 1998 to March 1999 and disallowed the purchases
of tobacco from farmers covered by Purchase Invoice
Vouchers (PIVs).
Invoking Sections 43 and 45 of the NIRC, Lancaster argued that
the February and March 1998 purchases should not have been
disallowed. Lancaster concluded that it correctly posted the
subject purchases in the fiscal year ending March 1999 as it
was only in this year that the gross income from the crop was
realized.
Subsequently, Lancaster received from the BIR a final
assessment notice (FAN) which assessed Lancaster's deficiency
income tax amounting to P11,496,770.18, as a consequence of
the disallowance of purchases claimed for the taxable year
ending 31 March 1999. Lancaster duly protested the FAN.
There being no action taken by the CIR on its protest, Lancaster
filed on 21 August 2003 a petition for review before the CTA
Division.
GOVERNMENT: The CIR argues that the revenue officers did
not exceed their authority when, upon examination (of the
Lancaster's books of accounts and other accounting records),
they verified that Lancaster made purchases for February and
March of 1998, which purchases were not declared in the
latter’s fiscal year from 1 April 1997 to 31 March 1998.
Additionally, the CIR posits that Lancaster did not raise the
issue on the scope of authority of the revenue examiners at
any stage of the proceedings before the CTA and,
consequently, the CTA had no jurisdiction to rule on said issue.
On both counts, the CIR is mistaken.
ISSUE: WON the CTA En Banc erred in holding that petitioner's
revenue officers exceeded their authority to investigate the
period not covered by their letter of authority.
HELD: No. Under the NIRC, the jurisdiction of the CTA is not
limited only to cases which involve decisions or inactions of the
CIR on matters relating to assessments or refunds but also
includes other cases arising from the NIRC or related laws
administered by the BIR.
In connection therewith, the CIR may authorize the
examination of any taxpayer and correspondingly make an
assessment whenever necessary. The authority to make an
examination or assessment, being a matter provided for by the
NIRC, is well within the exclusive and appellate jurisdiction of
the CTA. On whether the CTA can resolve an issue which was
not raised by the parties, we rule in the affirmative.
PROCTER & GAMBLE ASIA ., v. CIR
G.R. No. 205652, September 06, 2017
TAXPAYER: P&G filed subsequent applications to the BIR and
CTA requesting the refund or issuance of tax credit certificates
(TCCs) of its input VAT attributable to its zero-rated sales
covering the taxable periods of January 2005 to March 2005,
and April 2005 to June 2005. P&G presented evidence to prove
its entitlement for the VAT refund. The CIR, on the other hand,
submitted the case for decision based on the pleadings, as the
claim for refund was still pending before the BIR.
The CTA dismissed P&G's judicial claim for having been
prematurely filed; for failure to observe the 120-day period
granted to the CIR. Thus, CTA did not acquire jurisdiction over
the same.
P&G avers that its judicial claims were filed with the CTA
before the adoption of the Aichi doctrine. Accordingly, its
claims were deemed timely filed. P&G further contends that
the CTA En Banc gravely erred in applying the Aichi doctrine
retroactively.
Lastly, P&G claims that assuming, without conceding, that its
judicial claims were prematurely filed, its failure to observe the
120-day period was not jurisdictional but violates only the rule
on exhaustion of administrative remedies, which was deemed
waived when the CIR did not file a motion to dismiss and opted
to actively participate at the trial.
GOVERNMENT: The CIR, on the other hand, insists that the
plain language of Section 112(C) of the NIRC, as amended,
demands mandatory compliance with the 120+30-day rule;
and P&G cannot claim reliance in good faith with BIR Ruling
No. DA-489-03 to shield the filing of its judicial claims from the
vice of prematurity.
ISSUE: WON the CTA En Banc erred in dismissing P&G's judicial
claims for refund on the ground of prematurity.
HELD: Yes. Based on the plain language of the Sec. 112[C] of
NIRC, the CIR is given 120 days within which to grant or deny a
claim for refund. Upon receipt of CIR's decision or ruling
denying the said claim, or upon the expiration of the 120-day
period without action from the CIR, the taxpayer has 30 days
within which to file a petition for review with the CTA.
There is no dispute that the 120+30-day period is mandatory
and jurisdictional, and that the CTA does not acquire
jurisdiction over a judicial claim that is filed before the
expiration of the 120-day period. There are, however, two
exceptions to this rule. The first exception is if the
Commissioner, through a specific ruling, misleads a particular
taxpayer to prematurely file a judicial claim with the CTA. Such
specific ruling is applicable only to such particular
taxpayer. The second exception is where the
Commissioner, through a general interpretative rule issued
under Section 4 of the Tax Code, misleads all taxpayers into
filing prematurely judicial claims with the CTA. In these cases,
the Commissioner cannot be allowed to later on question the
CTA's assumption of jurisdiction over such claim since
equitable estoppel has set in as expressly authorized under
Section 246 of the Tax Code.
Clearly, BIR Ruling No. DA-489-03 is a general interpretative
rule. Thus, all taxpayers can rely on BIR Ruling No. DA-489-03
from the time of its issuance on 10 December 2003 up to its
reversal by this Court in Aichi on 6 October 2010, where this
Court held that the 120+30 day periods are mandatory and
jurisdictional. Thus, P&G's judicial claims were deemed timely
filed and should not have been dismissed by the CTA.
CIR vs. PHIL.ALUMINUM WHEELS, INC.
G.R. No. 216161, August 9, 2017
TAXPAYER: Respondent is a corporation organized and
existing under Philippine laws which engages in the
manufacture, production, sale, and distribution of automotive
parts and accessories. BIR issued a Final Assessment Notice
(FAN) against respondent, to which respondent requested for
reconsideration, and later an application for the abatement of
its tax liabilities. Respondent informed the BIR that it already
paid its tax deficiency on withholding tax and that it was also
in the process of availing of the Tax Amnesty Program under
RA 9480 to settle its deficiency tax assessment for the taxable
year 2001. Respondent also complied with the requirements
of RA 9480 which include: the filing of a Notice of Availment,
Tax Amnesty Return and Payment Form, and remitting the tax
payment.
GOVERNMENT: BIR denied respondent’s request and issued a
Final Decision on Disputed Assessment (FDDA) and demanded
full payment of the deficiency tax assessment from
respondent. BIR denied respondent’s application for tax
abatement on the ground that the FDDA was already issued by
the BIR and that the FDDA had become final and executory due
to the failure of the respondent to appeal the FDDA with the
CTA.
ISSUE: Whether respondent is entitled to the benefits of the
Tax Amnesty Program under RA 9480.
HELD: The Acceptance of Payment Form, the Notice of
Availment, the SALN, and the Tax Amnesty Return shall be
submitted to the RDO, which shall be received only after
complete payment. The completion of these requirements
shall be deemed full compliance with the provisions of RA
9480. Respondent’s completion of the requirements of the Tax
Amnesty Program under RA 9480 is sufficient to extinguish its
tax liability under the FDDA of the BIR. The FDDA issued by the
BIR is not a tax, case “subject to a final and executory judgment
by the courts” as contemplated by Section 8(f) of RA 9480. The
determination of the tax liability of respondent has not
reached finality and is still not subject to an executory
judgment by the courts as it is the issue pending before this
Court.
NORTHERN MINDANAO POWER CORP v. CIR
GR NO. 185115, Feb. 18, 2015
GOVERNMENT: Petitioner, as a corporation engaged in
production sale of electricity, allegedly incurred input VAT on
its domestic purchases of goods and services that were used in
its production. Hence, petitioner filed an administrative claim
for a refund on June 20, 2000 for the 3rd and 4th quarters of
1999, and on July 25, 2011 for 2000. Alleging inaction by the
CIR, petitioner filed a petition with the CTA on Sept. 28, 2001,
but the court denied the claim on the ground that term “zero-
rated” was not imprinted on the receipts or invoices presented
by petitioner in violation of Sec. 4.108-1 of RR No. 7-95,
petitioner failed to substantiate its claim for a refund and to
strictly comply with the invoicing requirements of the law and
tax regulations.
TAXPAYER: Petitioner appealed that Sec. 4.108-1 of RR No. 7-
95 which expanded the statutory requirements for the
issuance of the official receipts and invoices found in Sec. 113
of NIRC by providing for the additional requirement of the
imprinting “zero-rated” is unconstitutional. Company invoices
are sufficient to establish the actual amount of sale of electric
power services to the NPC and therefore sufficient to
substantiate petitioners’ claim for refund.
ISSUE: WON the judicial claim of petitioner should be
disallowed
HELD: Yes. Petitioner belatedly filed its judicial claims with the
CTA; having filed the appeal 319 days after the expiration of
the 30-day period and having failed to observe the 120-day
waiting period. The right to appeal is a mere statutory privilege
that requires strict compliance with the conditions attached by
the statute for its exercise. Petitioner failed to comply with the
statutory conditions and must therefore bear the
consequences. It already lost its right to claim a refund or
credit of its alleged excess input VAT attributable to zero-rated
or effectively zero-rated sales for the 3rd and the 4th quarters
of taxable year 1999 by virtue of its own failure to observe the
prescriptive periods.
Pursuant to Section 112(D) of the NIRC of 1997, respondent
had one hundred twenty (120) days from the date of
submission of complete documents in support of the
application within which to decide on the administrative claim.
The burden of proving entitlement to a tax refund is on the
taxpayer. Absent any evidence to the contrary, it is presumed
that in order to discharge its burden, petitioner attached to its
applications complete supporting documents necessary to
prove its entitlement to a refund.12 Thus, the 120-day period
for the CIR to act on the administrative claim commenced on
20 June 2000 and 25 July 2001.
As laid down in San Roque, judicial claims filed from 1 January
1998 until the present should strictly adhere to the 120+30-
day period referred to in Section 112 of the NIRC of 1997. The
only exception is the period 10 December 2003 until 6 October
2010. Within this period, BIR Ruling No. DA-489-03 is
recognized as an equitable estoppel, during which judicial
claims may be filed even before the expiration of the 120-day
period granted to the CIR to decide on a claim for a refund.
CHINA BANKING CORPORATION V. CIR
G.R. No. 172509 February 4, 2015
TAXPAYER: China Banking Corporation is engaged in
transactions involving sales of foreign exchange to the Central
Bank of the Philippines, commonly known as SWAP
Transactions. CBC did not pay tax on the SWAP transactions
for the years 1982-1986 and was thus assessed by the BIR for
deficiency DST on the sales of foreign bills of exchange to the
Central Bank. CBC protested asserting five defenses: double
taxation, absence of liability, due process violation, validity of
assessment and tax exemption. On appeal to the CTA, CBC also
raised the issue of prescription.
GOVERNMENT: More than 12 years after the CBC filed a
protest, the CIR rendered a decision in which it ordered CBC to
pay its tax deficiency. Thereafter, CBC filed a Petition for
Review with the CTA which denied CBC’s petition ruling that
the SWAP transaction is a telegraphic transfer subject to DST;
thus, CBC is liable to pay the alleged deficiency. The BIR did not
address the issue of prescription.
ISSUE: Whether the right of the BIR to collect the assessed DST
from CBC is barred by prescription.
HELD: Yes, the BIR’s claim is barred by prescription. Following
Sec. 319(c) of the 1977 NIRC assessed tax must be collected by
distraint or levy and/or court proceeding within three years
from the date when the BIR mails/releases/sends the
assessment notice to the taxpayer.
The attempt of the BIR to collect the tax through its Answer
with a demand for CBC to pay the assessed DST in the CTA did
not comply with Section 319(c) of the 1977 Tax Code. The
demand was made almost thirteen years from the date from
which the prescriptive period is to be reckoned. Thus, the
attempt to collect the tax was made way beyond the three-
year prescriptive period.
The principle of estoppel likewise applies. As a general rule,
the principle of estoppel and waiver does not prevent the
government from collecting taxes as the BIR is not bound by
the mistake or negligence of its agents. Nonetheless, the
Supreme Court enunciated that the principle is not absolute.
The Court ruled that estoppel cannot apply in this case as the
CIR failed to raise the issue of prescription in its Comment. The
12-year delay in collecting the assessed tax further convinced
the Court that estoppel could not apply in this case.
VISAYAS GEOTHERMAL POWER COMPANY vs. CIR
G.R. No. 197525 June 4, 2014
TAXPAYER: Petitioner VGPC is a special limited partnership
principally engaged in the business of power generation
through geothermal energy and the sale of generated power
to the Philippine National Oil Company, pursuant to the Energy
Conversion Agreement. VGPC filed with the BIR its Original
Quarterly VAT Returns for the first to fourth quarters of taxable
year 2005. On 2006, it filed an administrative claim for refund
of P14,160,807 with the BIR District Office of Ormoc City on the
ground that it was entitled to recover excess and unutilized
input VAT payments for the four quarters of taxable year 2005,
pursuant to Republic Act R.A. No. 9136, which treated sales of
generated power subject to VAT to a 0%.
Nearly one month later, while its administrative claim was
pending, VGPC filed its judicial claim via a petition for review
with the CTA praying for a refund or the issuance of a tax credit
certificate covering the 4 quarters of taxable year 2005. On
appeal, petitioner argues that the CIR should have been
estopped from questioning the jurisdiction of the CTA after
actively participating in the proceedings before the CTA
Second Division.
GOVERNMENT: CTA Second Division found that only the
amount of 7,699,366.37 was duly substantiated by the
required evidence. Both VGPC and the CIR appealed to the CTA
En Banc. The CTA En Banc reversed and set aside the decision
and resolution of the CTA Second Division and dismissed the
original petition for review for having been filed prematurely.
ISSUE: WON the CIR should have been estopped from
questioning the jurisdiction of the CTA.
RULING: No. It is a well-settled rule that the government
cannot be estopped by the mistakes, errors or omissions of its
agents. It has been specifically held that estoppel does not
apply to the government, especially on matters of taxation.
Taxes are the nation’s lifeblood through which government
agencies continue to operate and with which the State
discharges its functions for the welfare of its
constituents. Thus, the government cannot be estopped from
collecting taxes by the mistake, negligence, or omission of its
agents. Upon taxation depends the ability of the government
to serve the people for whose benefit taxes are collected. To
safeguard such interest, neglect or omission of government
officials entrusted with the collection of taxes should not be
allowed to bring harm or detriment to the people.
 BIR v. HON. ERNESTO D. ACOSTA, ET AL
G.R. No. 195320, April 23, 2018
TAXPAYER: Chevron Philippines, Inc. filed an administrative
claim for refund or credit with the BIR, with the amount
representing alleged overpayment of excise taxes on imported
finished unleaded premium gasoline and diesel fuel withdrawn
from its refinery in San Pascual, Batangas in 2003.
After inaction from the BIR, Chevron elevated the case to CTA
Special First Division. Chevron asserted that the BIR's motion
for reconsideration was a pro forma motion because the BIR
failed to set the motion for hearing pursuant to Sections 3 and
6 of Rule 15 of the Revised Rules of the CTA. Chevron further
maintained that non-compliance with the notice of hearing
requirement was a fatal defect that rendered its motion a
mere scrap of paper. As such, it is not entitled to judicial
cognizance and the filing of such defective motion did not toll
the reglementary period to appeal.
GOVERNMENT: CTA First Division partially granted the
petition, ordering BIR to refund petitioner only part of the
requested amount of Chevron. CTA denied BIR’s motion for
reconsideration, being pro forma and for lack of merit.
ISSUE: WON the CTA gravely abused its discretion in declaring
the motion for reconsideration filed by the BIR on October 14,
2010 to be a pro forma motion
HELD: No. The BIR was unable to show that the resolutions of
the CTA-Special First Division were patent and gross to warrant
striking them down through a petition for certiorari. No
argument was advanced to establish that the CTA-Special First
Division exercised its judgment capriciously, whimsically,
arbitrarily, or despotically by reason of passion and hostility.
It is not disputed that the BIR's Motion for Reconsideration
dated August 3, 2010 failed to comply with the provisions
provided for by the Revised Rules of the CTA. Specifically, the
motion filed by the BIR did not include a notice for hearing and
necessarily, the BIR likewise failed to set the motion for
hearing. In denying the motion, the CTA-Special First Division
cited Sections 335 and 636 of the Revised Rules of the CTA37 as
its basis. It is clear therefore that the CTA-Special First Division
simply applied the applicable rules which the BIR concededly
failed to observe. Accordingly, CTA-Special First Division's
dismissal of the motion for reconsideration was discretion duly
exercised, not misused or abused.
PROTECTORS’ SERVICES, INC. v. CIR
GR No. 118176, April 12, 2000
TAXPAYERS: Petition Protector’s Services, Inc., (PSI) is a
contractor engaged in recruiting security guards for clients.
After an audit investigation, the BIR assessed PSI deficiency
percentage taxes including surcharges, penalties and interests.
PSI protested, claiming that gross receipts subject to
percentage tax should exclude salaries of the security guards,
employer’s share of SSS, SIF and Medicare contributions. CIR
sent demand letters for payment of said assessments, plus
additional documentary stamp taxes and deficiency expanded
withholding tax. PSI paid the same but filed its second protest
the next day. BIR denied the protests stating that salaries of
security guards are part of taxable gross receipts for
determination of contractor’s tax.
PSI filed a petition for review with the CTA averring that the
assessments were without basis, and that the period for
collection has lapsed, the assessment letter having been sent
beyond 3 years from filing the quarterly returns.
GOVERNMENT: The CTA dismissed the petition stating that:
(1) the assessments were made within the 3-year prescriptive
period which should be reckoned from January 20, 1985, the
date of filing the final return; (2) receipt of the 1985
assessment cannot be denied as all assessments were sent in
1 envelope, as testified to by BIR personal; and (3) the protest
letter having filed only on January 12, 1988, or 33 days from
December 10, 1987, the request for reinvestigation was filed
out of time. On review by the CA, the CTA’s decision was
affirmed.
ISSUE: Whether or not the assessments were made within the
prescriptive period.
HELD: An assessment maybe administratively protested within
30 days from receipt thereof; otherwise, the assessment shall
become final and unappealable. In this case, PSI received the
assessments on December 10, 1987 and protested the 1983
and 1984 assessments on January 12, 1988, or 33 days
thereafter. Hence, the protests were filed out of time and PSI
can no longer dispute the correctness of assessment. The CTA
correctly dismissed the appeal for lack of jurisdiction.
Petitioner’s contention that the Government’s right
to assess and collect the 1983, 1984 and 1985 assessments
had already prescribed in view of BP700, which reduced the
prescriptive period for assessment and collection of internal
revenue taxes to 3 yrs, lacks merit BP700 was approved on
April 5, 1984. The 3-year prescriptive period for assessment
and collection of revenue taxes applied to taxes paid beginning
1984. Clearly, the tax assessment made on December 10, 1987,
for the par 1983 was still covered by the 5-year statutory
prescriptive period.